Foreign investor group eyes majority stake in PLDT unit

A GROUP of foreign private equity investors is looking to acquire a majority stake in Voyager Innovations, Inc., according to PLDT Chairman, President and CEO Manuel V. Pangilinan.

“This week, we signed a non-binding, fairly-formed and detailed term sheet with certain foreign investors, who will take an investment position and management participation in Voyager,” he said in a press briefing on PLDT’s first-half results on Thursday.

The telecommunications giant has four weeks to finalize deal with the foreign group over the Voyager investment.

“Once the definitive documents are signed, two things will happen: one, we will make a disclosure to the stock exchange, and secondly, we will notify the Philippine Competition Commission (PCC) with this particular investment to be approved by the PCC,” Mr. Pangilinan said.

The sale of Voyager, which registered a P1.3-billion loss in the first six months of 2018, is expected to have a positive impact on PLDT’s financials.

“It’s likely to produce a significant gain to the accounts of PLDT. I think if we can expedite the approval from the PCC, it is likely that we can see the gain some time in the fourth quarter of 2018,” Mr. Pangilinan said.

As the digital innovations unit of PLDT, Voyager manages PayMaya Philippines, Inc., Smart Money, FINTQ, Lendr and freenet.

“Since this will involve as well a significant amount to be injected into Voyager, it could fund the operations of Voyager on expanding in the next three to four years,” the PLDT chairman added.

Mr. Pangilinan declined to name the investors, except to say they are involved in financial technology.

PLDT is likely to remain the single largest investor in Voyager with its investment of P9 billion to P10 billion so far, but Mr. Pangilinan said the foreign investors as a group would take a majority share when the deal is done. He added PLDT will retain a 45% stake in Voyager.

On Thursday, the telecommunications giant reported its attributable net income dropped 58% to P4.862 billion in the second quarter, from P11.56 billion during the same period a year ago. Last year’s figure included proceeds from the sale of its equity interest in Beacon Electric Asset Holdings, Inc.

For the first half, attributable net income fell 29% to P11.76 billion, “primarily due to lower net income from wireless and other businesses, partly offset by higher net income from fixed line business.”

Excluding non-recurring items, the six-month core profit dropped 25% to P13.13 billion. PLDT maintained a full-year core income guidance of P23-P24 billion, excluding Voyager.

“We have stayed on the growth path through the mid-point of this year by banking chiefly on the momentum of our Home and Enterprise businesses. Our Individual Wireless business has taken further steps forward, making gradual additions to its revenues and subscriber base,” Mr. Pangilinan was quoted in a Thursday statement as saying.

Revenues rose 5% to P41.73 billion in the April to June period, bringing the six-month tally 4% higher to P82.2 billion.

The company said this was “primarily due to higher revenues from data services in the fixed line business, as well as higher non-service revenues from the wireless and fixed line businesses, partially offset by lower revenues from mobile and home broadband services in the wireless business.”

For the first half, data/broadband and digital services accounted for P39.6 billion in revenues, representing 54% of the total service revenues.

Fixed broadband revenues grew 58% to P13.2 billion; mobile Internet rose 29% to P12.3 billion; and corporate data and data center generated P10.9 billion in revenues, up 13%.

By business unit, PLDT Home recorded a 14% increase in revenue during the January to June period to P18 billion, fuelled by a strong demand for fiber-powered broadband service.

PLDT Enterprise revenues went up 9% to P18.7 billion in the first half, driven by higher wireless data, cloud and other services.

The Individual Wireless business group’s revenues jumped 2% to P29.9 billion, as mobile data revenues grew.

Mr. Pangilinan said PLDT conducted a pilot test with Ericsson for its 5G roll out on Wednesday, targeting to launch this in early 2019.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.